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Prepared
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Discussion Starter · #1 ·
http://www.twincities.com/ci_150891...ncities.com-www.twincities.com&nclick_check=1

"A: Gold topped $1,200 an ounce the day after the Dow Jones industrial average plunged, with investors buying it as a so-called "safe haven" — a place people put money when they are afraid about stocks, bonds and currencies — during Europe's debt crisis. Then, when European officials promised a bailout package worth nearly $1 trillion, worries were lifted somewhat and gold dropped. But the next day, as investors rethought the rescue plan, it rose again.

"Gold has been acting as a safe haven, but is it worth $1,200? No," said Leonard Kaplan, president of commodities futures brokerage firm Prospector Asset Management. "Gold at $1,200 is really silly."

Kaplan, who has been trading commodities for 37 years, said until the last couple of weeks, people have been fickle about treating it as a safe haven — buying it based on news such as the Sept. 11, 2001, attacks, but selling it shortly thereafter.

Based on fundamental value, he said, gold should be priced at close to $450 an ounce, the cost of producing it. Kaplan's conclusion is: "This will end badly." "

I've come to wonder, as a member of the X-Gen, that maybe the best investments are whatever the Boomers are NOT doing. I've found recently in my antique/estate sale side business that whenever an estate sale is crawling with Boomers that prices tend to be high -- and they're willing to pay. So I'm wondering whether we X-Gen and younger people need to be very careful -- to realize that some among the Boomers have money to burn. Whether Hummers or McMansions, if we go into an auction house with Boomers they may drive the prices (as they did with real estate) way into the stratosphere.

I do argue in favor of PM's. But at these prices? As with real estate, to be a good investment requires that a new generation of buyers comes along -- both willing and able to pay still more. Clearly the jig was up with real estate. Are they now pushing gold to that point? I do believe that PM's will always be in demand, but are the prices sustainable for resale at that level in 1 year? 5?
 

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Under 2% of the investment population in the United States own PM's contrasted against the % that owns a house, stocks, and bonds....

I wonder what this idiot's argument would be for the "worth" of a USD since we all know the "cost of producing it"... what joke this guy is and I am not even that much of a "gold bug".

The problem people make is holding the term/theory/thought/notion of "price" in absolute terms. What is the "price" of gold and what are you pricing it in? Expensive "at these levels" means nothing without a further qualifying statement.
 

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I'm no serious player either, I only have a few ounces of gold ( mostly in 1/10 and 1/25 Eagle and Maple fractionals ) and I got in when spot was around $800 or so. I can't personally justify getting anynore right now,partially because of the "high" price, and partially because my humble net-worth doesn't justify increasing the ratio I have right now.
But, if that were to change, say I won the lottery, then I'd be driving down to Gainesville coins and paying cash for as much as they'd let me have, even at these prices. ;)
While we can't exactly predict where gold is going any time soon, we CAN predict where the U.S. dollar is going, eventually, and at that point, gold's "price" will move inversely.
 

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I would like to thank FranchiseKid for having the courage to call BS when needed...

Gold is expensive, maybe even overpriced depending on your perspective, but like any asset it is worth what others are willing to pay for it. $450.00 an ounce gold is a pipe dream. Anyone that has some that would like to part with it at $450.00 an ounce send me a private message and I will buy all you care to sell. Lets see how many offers I get. Point made, thanks FK.
 

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Later Dude Saint
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interesting perspective. i didnt know gen x had any formed.
i suppose i lean into boomer more than genx .
all i can tell you is it sucked and sucked some more.
and its suckin even harder as we speak.
the joint is gutted.psychotic from psy-ops.
a full-on corporate police state..
i digress.
i bought some gold at 950 and thought that high.
but its feels good to have some.
now i stock upon food.
gardening is the new golf?
bullets seem a good investment.
none of the jobs are coming back.
better make your own..
the thing with mcmansions ..now theres space for grandma and grampa that were kicked out of the home...your unemployed brother in law. etc..
the garage become a store/workshop.
swimming pool a fish farm.
kids can trap rats and scavenge for copper and whatnot.
the soccer field can be converted to hemp production.
which reminds me..
 

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I agree that it is risky to buy now. It may go to $2K but when (hopefully sooner than latter) things settle down it will fall fast. I was thinking about selling puts on GLD, but fear it will fall too fast and I'll get burned. I some of my Philharmonics and Maple Leafs but am holding on to my Eagles and Krugs. I wish I had bought more when I started about a year ago.
 

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RESET CONGRESS!!
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I have purchased some PMs in the past, mostly because my wife's cousin got me interested in it. I confess,.. I bought it in large part because it was shiny. ..and affordable at the time. (I was buying silver rounds at $5.50/ounce.) Gold was also relatively affordable. That was then. In the past several years, I have added a few silver rounds, but only becaude they were interesting. I really never bought them as an investment, ... they will no doubt be given to grandkids. I just find them interesting.
I have a BUNCH of old silver dollars that my dad got in Las Vegas, back in the day when you bought buckets of them for the slot machines. (I'm dating myself, eh.) I have an old cigar box full of them.
Anyway,... if there is a point to this post,.. it's that my spare dollars will be invested in filling the pantry, buying 'stuff' that would be necessary should the shtf . I avoid debt like the plague. I only pay attention to the market(s) as a barometer of world events now. Boy, have my priorities changed. I spend more time on learning skills and maintaining the family's health.
The times, they are a changin' .
 

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Criminitly!
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I personally think the general investors ceilling will be $2200 to $2500 I think ma, pa, me and you will hard pressed to put 5 grand down on two ounces. I think after that the big moves and dollar slide will set in and institutional investors will push gold to the moon!
Let me say I didn’t just pull this number out of my arse. The reason I say $2200-$2500 is this would be 10x’s the low of $250 and double the former ceiling high. I think at this point dollar slide will be evident to everyone and inflation will start gobbling up almost all discrecessionary spending at all levels dropping individual investors to the side. It is at this point many institutional investors will pick up the ball and start running with it to preserve some capitol.
 

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Prepared
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Discussion Starter · #13 ·
Check out the larger article. I guess I felt the guy brought up some points, namely that when price departs sufficiently from the cost of labor that went into it -- then you have the definition of a bubble. Or something like it.

I'm not sure if his caution was meant to be in favor of fiat currency. I see plenty of alternatives to both fiat currency and gold. Silver, ammo, copper, brass, used cars, boats, antiques, whatever other hard/durable good you think may match or beat inflation.

One of the troubling trends I noted with Kitco's graphs for gold in 3-4Q 2008 was that as the stock market tanked, so did gold. It made a partial rally before the election, but tanked again in November, near $700/oz. Since gold is traded on paper more than physical -- and fixed at London and NY -- its price pressures are somewhat subjected to the funny-money economy.

I've always supported PM's, but I've yet to find anyone I agree with or disagree with 100% either way.

Under 2% of the investment population in the United States own PM's contrasted against the % that owns a house, stocks, and bonds....

I wonder what this idiot's argument would be for the "worth" of a USD since we all know the "cost of producing it"... what joke this guy is and I am not even that much of a "gold bug".

The problem people make is holding the term/theory/thought/notion of "price" in absolute terms. What is the "price" of gold and what are you pricing it in? Expensive "at these levels" means nothing without a further qualifying statement.
 

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Check out the larger article. I guess I felt the guy brought up some points, namely that when price departs sufficiently from the cost of labor that went into it -- then you have the definition of a bubble. Or something like it.

I'm not sure if his caution was meant to be in favor of fiat currency. I see plenty of alternatives to both fiat currency and gold. Silver, ammo, copper, brass, used cars, boats, antiques, whatever other hard/durable good you think may match or beat inflation.

One of the troubling trends I noted with Kitco's graphs for gold in 3-4Q 2008 was that as the stock market tanked, so did gold. It made a partial rally before the election, but tanked again in November, near $700/oz. Since gold is traded on paper more than physical -- and fixed at London and NY -- its price pressures are somewhat subjected to the funny-money economy.

I've always supported PM's, but I've yet to find anyone I agree with or disagree with 100% either way.
At the end of 2008 and into 2009 there was a global shortage of USD's very similar to what we saw back when this crisis first hit and The Fed bailed out the universe with swap lines. Every risk asset was sold during that time to generate cash. Look at the USD hit a very high level during that period and then absolutely crater after the March 2009 low's. It was a liquidity story and most assets still are, but they are being wagged by the currency dog, except (IMHO) for PM's. Those have become a story of "We do not believe your fiat currencies any longer and we do not believe that you can inflate another bubble with them...". So you have the gold market calling BS on all the Central Banks and on the financial system. When you add in a premium on currency destruction and devaluation, you can throw "cost of production" out the window in my mind. Unless you are going to try to measure the cost to produce trust in a medium of exchange/financial system.
 

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Prepared
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Discussion Starter · #16 ·
Well that's right -- gold was undeniably a fantastic investment after the real estate market cooled off. But is this sustainable, or just another bubble? Not too many commodities can keep an upward trend like this for very long.

I guess my own indicator will be when you start seeing those "we buy gold" fly-by-night operations in every major city start closing their doors. When you see that, it might well be time to sell in a hurry.
 

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With most miners cost of production at $450 or more anyone thinking gold is worth so little is not dealing in reality. Gold is getting harder to find and the ore is of lower quality.When you have to dig,transport and process tons more of ore to get the same or less production someone pitching bargain prices is not doing his homework. Every year the increased mine safety rules and dust level regulations increase the costs of production along with fuel & electricity.

Red
 

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Gold is only going up. $1500/ounce is just around the corner. Has anyone noticed that lately gold has unpegged itself from everything else? There used to be a correlation between gold, US dollar, crude oil, bonds, etc. Now gold just does its own thing which is mainly going up...

Play your card as you want but I for one am 99.9% positive that gold is heading for the stratosphere.
 

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Well that's right -- gold was undeniably a fantastic investment after the real estate market cooled off. But is this sustainable, or just another bubble? Not too many commodities can keep an upward trend like this for very long.

I guess my own indicator will be when you start seeing those "we buy gold" fly-by-night operations in every major city start closing their doors. When you see that, it might well be time to sell in a hurry.
I agree that seeing ATM's that dispense gold is somewhat interesting but again, I have never lived through an outright global currency crisis. It is possible for all fiat currencies to be ignored for trade by civilians. We can trade goods in whatever "currency" we wish. Food, labor, gold, silver, pine tree shillings.... it is only law in the US that you must "accept" the USD as payment for all debts, but you can accept anything else you want.

With such substantial runs on gold dealers overseas, I think we are close to seeing masses start to shun fiat currencies. The game is no longer hidden in plain sight in terms of what weapons the system has.. it is Bazooka Economics. Print and borrow.... if that does not work, which it will not, you devalue the currency. Well, if that is the path we are going down, and any consenting adult would have to at least agree with the "print and borrow" playbook, then the currency in your pocket will be "worth less" and perhaps worthless. Enter PM's.

When outright collapse is clearly on the table, how can someone say PM's are in a bubble? My definition of a bubble has nothing to do with replacement costs alone, or cost of production. If you can paint me the most beautiful piece of artwork, and the cost of production is $10, and you did it while drunk one night in 5 minutes, but again, it is the most beautiful artwork in the world "to me", then I would be willing to pay you much more than cost of production. I cannot get that artwork anywhere else, so there are many other factors out there. My definition of a bubble goes back to the greater fool theory... I am buying your condo at $200K because I think I can sell it for more. That is a bubble. That is pure speculation with no fundamentals underneath it.

People are, in essence, giving a no-confidence vote for their currencies and exchanging them for PM's. Not because they think they can sell them for more than what they bought them for necessarily (of course there is some of that in any market), but because they full out believe that whatever they hold in their wallet now, will be worthless in the future.
 

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Well that's right -- gold was undeniably a fantastic investment after the real estate market cooled off. But is this sustainable, or just another bubble? Not too many commodities can keep an upward trend like this for very long.

I guess my own indicator will be when you start seeing those "we buy gold" fly-by-night operations in every major city start closing their doors. When you see that, it might well be time to sell in a hurry.
As long as people are willing to sell their gold to those guys at far under its real value those places will thrive. With all the ads they run you know the profit margin is high. As long as the economy is poor people will flock to these type sales not researching the real value before selling.

I'm betting someday when the gold bubble bursts the cash for gold guys will be on every corner wanting to buy. At 60 cents on the dollar!

If I was a young guy I would jump into the cash for gold racket with both feet!

Red
 
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